As the holiday season approached this year, the designers at Pacsun were given a new directive: create a seasonal collection for the metaverse. So they plucked a handful of the brand’s latest styles sold online and in stores – such as a plaid flannel shirt, black wash baggy jeans and an orange raglan hoodie – and with a few clicks turned them into flat, virtual replicas guaranteed to fit any avatar on your shopping list.

The idea, at least, is that teens who put physical clothing on their Christmukkah wish lists may want a matching virtual set for their avatars. The digital versions, which are less expensive, can be purchased on Roblox for under $5.

“What we’ve found is there’s a strong desire for there to be like items,” said Brieane Olson, Pacsun’s president, who noted that 85% of its customers are Gen Z. “We’re certainly focused first and foremost on our physical product offering. From an exploration standpoint, virtual is a fast follow.”

More retailers are selling in the metaverse this holiday season, looking to cater to young shoppers who are interested in building a virtual closet and outfitting their avatars in their favorite brands. The metaverse might be contributing little to the bottom line during retail’s make-or-break holiday quarter, but no company wants to be left out if the metaverse becomes the next big thing, nor do they want to appear unhip this year, when it’s starting to be a thing.

Many retailers are making virtual holiday goodies free. Amazon’s print holiday toy catalogue directed shoppers to its new virtual world on Roblox and offered a free virtual mask in the shape of a fox, supposedly as enticement.

American Eagle set up a virtual holiday bazaar on Roblox, inspired by famous markets in Berlin and New York. As the snow gently falls on the top of rows of booths decked out with string lights, avatars can grab a hot coffee, build an ice sculpture and shop. Digital replicas of the brand’s flannels, sweaters and hoodies are free, a strategy that has helped it garner 35 million try-ons and made it the second-most engaged-with brand since its launch on the platform earlier this year, behind only Gucci.

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By the holidays next year, the same clothing may have a price tag. “We feel now that we’ve understood there’s real interest,” said Craig Brommers, chief marketing officer at American Eagle Outfitters, which owns American Eagle and Aerie. “We definitely think there’ll be an opportunity to sell digital clothing in the not-so-distant future.”

Other retailers are taking a different tack, launching virtual holiday stores on their regular websites, where shoppers can click through some sort of festive, immersive space featuring a curated selection of real holiday gifts, rather than scrolling through pages and pages of items to hunt down the perfect item. There’s no need to download anything or get a virtual reality headset, plus shoppers can be steered toward purchasing physical products.

For instance, cosmetics brand Charlotte Tilbury has a banner at the top of its website that invites shoppers to visit its virtual store, a glittery futuristic space with gold Christmas trees and disco balls. With some patience, visitors can change the hair, skin color and makeup on their avatar, invite friends to log on at the same time and browse products, like emerald green eyeshadow, scarlet matte lipstick and super black mascara. There’s a discount waiting for those who play a short computer game.

“We really wanted a holiday wonderland,” said Corinne Suchy, Charlotte Tilbury’s chief growth and technology officer. “You can try on Charlotte’s holiday look on your avatar and then also purchase that look and wear it to the holiday party you’re going to this weekend.”

The virtual storefront is powered by a tech company called Obsess, which also worked with organizations like Coach, Crocs and St. Jude’s to launch virtual holiday stores this year.

“We’re super super busy right now,” said Neha Singh, founder and CEO of Obsess. “This is definitely our biggest holiday season yet.”

More types of organizations are opening virtual holiday storefronts this year, she said, including nonprofits and beauty, fashion and luxury companies. Eight in ten of her customers are designing completely new digital spaces, often with some sort of gamification or social aspect. Last year, most brands simply opted to recreate a physical storefront.

Customers often end up spending more time in these virtual spaces than they do on a traditional website, said Singh, which translates into as much as a 25% increase in purchase rate and as much as a 20% increase in average order values. When shoppers invite friends to join them at a virtual store, their time spent jumps by 200%.

“A lot of brands who are coming to us are doing so to attract Millennial and Gen Z customers,” said Singh. “This demographic is expecting more of these types of experiences.”

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